By Christoph Steitz
FRANKFURT (Reuters) - Innogy (DE:IGY), Germany's largest energy company, said on Friday that lower tariffs had helped it reverse an outflow of customers from British unit Npower, but the UK business slipped to an operating loss.
Innogy, 76.8-percent owned by RWE (DE:RWEG), added about 50,000 customers in Britain in the second quarter, while posting first-half results that were broadly in-line with the average forecasts in a Reuters poll.
"The sword of Damocles still hangs over all of this, in the form of further regulatory intervention by the UK government," Chief Financial Officer Bernhard Guenther told journalists during a call.
At group level, Innogy posted first-half adjusted earnings before interest and tax (EBIT) of 1.73 billion euros ($2.03 billion), in line with the average forecast in a Reuters poll of banks and brokerages. Its core network unit, where profits were up 19 percent, contributed nearly two thirds.
Operating profit at its German retail business was 340 million euros, up 23 percent from a year ago.
Innogy shares were trading 1.3 percent lower at 0815 GMT.
Innogy halted an exodus of customers from its UK retail business Npower, which lost 200,000 customers in the first quarter when it suffered from billing issues and rising competition from smaller rivals.
At the end of June, Npower had 4.757 million retail electricity and gas customers in Britain, up 1 percent from March.
The unit's first-half adjusted loss before interest and tax stood at 12 million euros ($14 million), compared with a profit of 85 million a year earlier. Innogy confirmed it does not expect the unit to generate positive adjusted EBIT this year.
Britain's government launched a review this month on how best to reduce long-term energy bills for households and businesses although it has backed away from pre-election proposals to cap some households' energy bills.
Innogy was split off from parent RWE last year, giving investors direct access to better performing renewables, networks and retail operations as opposed to RWE's legacy power plant and volatile energy trading business.
It hopes to play a key role in the expansion of electric car charging stations in Europe and the United States, where it set up a subsidiary in California last month in a bid to take on ChargePoint, the world's biggest e-charging vendor.
In Europe, the group aims to be selected as the supplier of super-fast charging stations by a group of carmakers, facing stiff competition from companies like Siemens (DE:SIEGn) and German peer E.ON (DE:EONGn).
Despite attempts by regulators to push car manufacturers to sell more electric cars to curb greenhouse gas emissions, the vehicles face challenges from low gasoline prices, high battery costs and uncertain investment in recharging infrastructure.
Innogy stuck with its group outlook for 2017, forecasting adjusted EBIT would rise by 6 percent to about 2.9 billion euros and adjusted net income - the source of its dividend - exceed 1.2 billion euros, up at least 7 percent.
